SMM Manganese Ore Weekly Price Review and Forecast (1-5 Jul. 2013)

SHANGHAI, Jul. 1 (SMM) – 
 
Review:
Trading of imported manganese ore at ports remained lackluster last week. Quotations by overseas suppliers such as BHP to Chinese buyers for August are level with July. Market players understand that overseas offers may be lowered as there is still room for prices of imported ore at ports such as South African mixed carbonate manganese ore to fall further. SMM, however, believes overseas quotes to Chinese importers will not drop. The decline in manganese ore prices at ports was due largely to oversupply, especially South African mixed carbonate manganese ore, and tepid downstream demand. 

Prices: 
In the Port of Tianjin, the mainstream traded price for Australian manganese ore (Mn48%, lump) was RMB 44.5-45/mtu; RMB 36/mtu for South African mixed carbonate manganese ore (Mn38%, lump), and RMB 38.5/mtu for South African high-iron manganese ore (Mn35-36%, Fe18%). In southern ports, the mainstream quotations for Australian manganese ore (Mn48%, lump) were RMB 43-43.5/mtu. Mainstream traded prices were RMB 38/mtu for South African high-iron manganese ore (Mn35-36%, Fe20%); RMB 36.5-37/mtu for South African mixed carbonate manganese ore (Mn38%, lump), and RMB 40/mtu for Australian high-silicon manganese ore (Mn36%, Si20%). 
   
Inventories:
Inventories at ports totaled 2.55 million mt last week, with 1.3 million mt in the Port of Tianjin, up 100,000 mt on a weekly basis, and 900,000 mt in the Port of Qinzhou, 50,000 mt over the previous week. The appreciable growth in port inventories was due to more goods arriving and anemic downstream demand. Rising inventories weighted down manganese ore prices, but no aggressive sell-offs at lows have not been reported thus far.

Steel Market: 
The average daily crude steel output across China is estimated at 2.16 million mt in mid-June, up 0.37% from early June. This is mainly because medium and large steel producers remain in operations. Growing output against weak downstream demand compounded the imbalance between supply and demand. Steel stocks in trading markets remain high, albeit down for 14 consecutive weeks. Steel inventories at major domestic steel producers amounted to 13.55 million mt in mid-June, down 130,000 mt from mid-May, but up 1.4 million mt from the same period last year.   

Forecast:
Manganese alloy tender prices by steel producers for July will be released in the coming week, which are expected to hold level with the previous month. Imported manganese ore prices at ports are expected to inch down given the soft demand downstream.